Jersey’s Government has produced a policy paper setting out changes to ensure Jersey remains an internationally competitive and attractive place to do business.
The paper, OECD Pillars 1&2 – Tax Policy Reflections, sets out the Government of Jersey’s current policy thinking on the recommendations made by the OECD, a global standard-setter. As one of the 137 participating members of the OECD Inclusive Framework on Base Erosion and Profit Shifting (BEPS), Jersey is exploring options to implement the new set of rules known as the ‘Two Pillars’. The new rules are aimed at addressing tax challenges in a world where the cross-border operating model of large businesses has changed beyond recognition in recent years.
The paper also invites the views of stakeholders on various policy options, and any significant implementation issues which might arise should they be introduced in Jersey.
The changes are unlikely to affect many companies located in the Island; the introduction of the Two Pillar initiative applies to organisations that meet revenue thresholds of €20 billion for Pillar One, or more than €750 million for Pillar Two. Companies outside of these categories will remain under the existing corporate income tax regime.
The Minister for External Relations and Financial Service, Senator Ian Gorst, said: “We have been engaging with the OECD for some time, and are committed to maintaining tax simplicity and certainty to support the stability and attractiveness of the Island’s business environment.
“Our work on the two pillars, and the feedback that we would like to receive from stakeholders will ensure that we remain globally competitive and compliant with international standards.
“The Government of Jersey has always held the view that international tax standards should be developed on a global basis by organisations such as the OECD. It ensures that the principle of a ‘level playing field’ is applied among tax jurisdictions globally, and is critical to balance the interests of small and developing jurisdictions with those that are larger and more developed.”
The Government has produced a paper that outlines the most appropriate options available to Jersey in implementing the Two Pillars – click here to read it.